J&J Warns: Pharma Tariffs & Drug Shortages

Johnson & Johnson CEO Warns US Tariffs Could Trigger Medicine Shortages

Joaquin Duato,CEO of Johnson & Johnson,cautioned that potential U.S. tariffs on the pharmaceutical industry could disrupt supply chains and lead to critical drug shortages. His comments come amid rising concerns over the impact of protectionist trade policies on healthcare.

2025

The Threat of Pharmaceutical Tariffs

While the pharmaceutical industry was initially excluded from recent wide-ranging tariffs, the U.S. management has signaled its intent to explore tariffs as a means to bolster domestic manufacturing. Currently, the U.S. benefits from a tariff exemption on pharmaceuticals under the 1994 World Trade Organization (WTO) trade deal.

Duato addressed the potential ramifications during a call with analysts, stating, Ther’s a reason why pharmaceutical tariffs are zero. It’s because tariffs can create disruptions in the supply chain, leading to shortages.

this concern is notably relevant in the U.S., where a important portion of essential medicines and active pharmaceutical ingredients (APIs) are sourced from overseas.A disruption in this supply chain could have severe consequences for American patients, perhaps limiting access to life-saving medications.

Impact on Medical Devices and Technology

The impact of tariffs isn’t limited to pharmaceuticals. Medical devices and technology, including surgical robots manufactured by Johnson & Johnson, have already been affected by the new U.S. tariffs. This could lead to increased costs for hospitals and healthcare providers, potentially impacting patient care and access to advanced medical technologies.

Duato suggests an choice approach: If what you want is to build manufacturing capacity in the US, both in medtech and in pharmaceuticals, the most effective answer is not tariffs but tax policy. He argues that strategic tax incentives would be a more effective way to encourage domestic manufacturing without jeopardizing the supply of essential medicines and medical devices.

Johnson & Johnson’s Investment in US Manufacturing

In March 2025, Johnson & Johnson announced a significant investment of $55 billion in new U.S. plants over the next four years. This represents a 25% increase in investment compared to the previous four-year period,demonstrating the company’s commitment to expanding its domestic manufacturing footprint. However, Duato implies that tariffs could undermine such efforts.

US Administration Investigates Drug Imports

On April 1st, the U.S. administration initiated an investigation into the national security implications of relying on imported medicines, with a 21-day consultation period.This investigation is widely viewed as a potential precursor to imposing tariffs on the pharmaceutical industry.

Duato emphasized the importance of collaboration between healthcare companies and the government to mitigate some of the vulnerabilities that exist … in our healthcare supply chain. This proactive approach aims to address concerns about supply chain security while minimizing the potential for tariffs that could harm patient access.

A Silver Lining?

J&J’s chief financial officer, joe Wolk, offered a potentially optimistic perspective on the investigation, suggesting it could highlight the importance of affordable generic drugs in the U.S. market.He stated, In some respects, it could very much be good news.The last thing anybody wants is to deny a cancer patient the oncology therapeutic that will help them not only cope with the disease but conquer it. This suggests that the investigation might reveal the critical role of imported generics in providing affordable healthcare options for Americans.

Industry Response and astrazeneca’s Warning

While the pharmaceutical industry has generally avoided publicly condemning tariffs, hoping for favorable outcomes through behind-the-scenes negotiations, concerns are growing.Michel Demaré, AstraZeneca’s chairman, previously warned that tariffs could harm patients and health systems, and restrict health equity. These concerns reflect the industry’s understanding of the potential negative consequences of tariffs on patient access and healthcare costs.

Johnson & johnson’s Financial Performance

Johnson & johnson reported strong first-quarter sales of $21.9 billion, a 2.4% increase from the same period last year, exceeding analysts’ expectations of $21.6 billion. Despite this positive performance, the company has maintained a cautious outlook, suggesting potential challenges ahead.

Leerink analyst David Risinger noted that J&J’s decision not to slash its forecast is “a welcome relief in the wake of recent stock market turmoil.” However, Bloomberg Intelligence analysts John Murphy and Sam Fazeli pointed out that the company’s decision not to increase its guidance despite the strong quarter indicates caution in the face of potential future volatility.

Potential Implications for U.S. Healthcare

The debate over pharmaceutical tariffs highlights the complex interplay between trade policy, domestic manufacturing, and healthcare access in the U.S. The potential for medicine shortages and increased healthcare costs raises significant concerns for American patients and the healthcare system as a whole.

The U.S. must carefully consider the potential consequences of tariffs on the pharmaceutical industry and explore alternative strategies, such as tax incentives and streamlined regulatory processes, to promote domestic manufacturing without compromising patient access to essential medicines.

Expert Opinions on Pharmaceutical Tariffs

Economists and healthcare policy experts have weighed in on the potential effects of pharmaceutical tariffs.A study by the peterson Institute for international Economics found that tariffs on imported drugs would likely increase drug prices for American consumers, potentially leading to decreased adherence to medication regimens and worsening health outcomes. Other experts argue that tariffs could incentivize domestic production and reduce reliance on foreign suppliers, but only if implemented strategically and in conjunction with other policy measures.

Expert	Affiliation	Quote
Dr. Sarah Johnson	Harvard Medical School	“Tariffs on pharmaceuticals could disproportionately affect vulnerable populations who rely on affordable generic medications.”
Dr. David Lee	American Enterprise Institute	“A targeted approach to tariffs, coupled with tax incentives, could encourage reshoring of pharmaceutical manufacturing.”
Ms. Emily Carter	Patients for Affordable Drugs	“We must prioritize patient access to affordable medications. Tariffs that raise drug prices are unacceptable.”

Recent Developments and Counterarguments

Sence the initial announcement of the investigation,several pharmaceutical companies have engaged in discussions with the U.S.administration to present data on the potential impact of tariffs. Some companies have argued that tariffs would not only raise prices but also stifle innovation by reducing resources available for research and development. A counterargument suggests that tariffs could encourage greater openness in pharmaceutical supply chains and reduce reliance on countries with less stringent quality control standards.

Practical applications and Call to Action

For U.S. readers, understanding the potential impact of pharmaceutical tariffs is crucial for informed civic engagement. Contacting elected officials to express concerns about drug prices and access to medications can influence policy decisions. Supporting organizations that advocate for affordable healthcare and clear pharmaceutical pricing can also make a difference.

moreover, patients should discuss any concerns about medication costs or availability with their healthcare providers. Exploring options like generic alternatives or patient assistance programs can help mitigate the impact of potential price increases.

Copyright The Financial Times Limited 2025/Bloomberg

What is Dr.Vance’s opinion on the potential impact of pharmaceutical tariffs on the supply chain, particularly regarding access to essential medicines?

Navigating the Tariff Tangle: An Interview with Dr. Eleanor Vance on the Future of US Pharmaceuticals

Archyde News Editor, [Date]

Introduction

Hello, and welcome to Archyde News. Today, we’re delving into the complex world of pharmaceutical tariffs and their looming impact on the American healthcare system. Joining us is dr. Eleanor Vance, a leading healthcare policy analyst at the Brookings Institute. Dr. Vance, welcome.

The Threat of pharmaceutical Tariffs

Archyde news: Dr. Vance, the U.S. administration is considering tariffs on pharmaceuticals. What’s the core of the concern here?

Dr. Vance: thanks for having me. The primary concern is the disruption to the supply chain. A important portion of our essential medicines and active pharmaceutical ingredients, or APIs, come from overseas. Tariffs coudl increase costs,leading to shortages and restricting patient access,which is particularly worrying for life-saving medications.

Impact and Alternatives

Archyde News: We understand that medical devices are also involved. Could you elaborate on this?

Dr. Vance: Absolutely. Medical devices and technologies, like surgical robots, are also facing the pressure of tariffs. This increase in procurement costs can impact hospitals and patient care. Instead of tariffs, tax incentives might be more effective in encouraging domestic manufacturing. Johnson & Johnson,for instance,has announced significant investments in U.S. plants, potentially undermined by such tariffs.

Industry Response and Concerns

Archyde News: The industry seems wary but not overly outspoken. what’s driving this caution?

Dr. Vance: The pharmaceutical industry often engages in behind-the-scenes discussions,hoping to influence the policy. astrazeneca’s chairman, Michel Demaré, publicly warned of the impact on patient access. Tariffs have been shown to restrict health equity and may also stifle innovation by reducing research and advancement investments.

The Upsides and Downsides

Archyde News: Some have suggested tariffs could improve the domestic supply chain. What are yoru thoughts?

Dr. Vance: While the idea is there that tariffs might incentivize domestic production, they are a blunt instrument. Careful strategic implementation is needed. The administration is investigating the national security implications of relying on imported medicines, which might be the first step for the future. We must balance the need for domestic manufacturing with the need to ensure affordable access to medications, especially generic medicines.

Expert Perspectives

Archyde News: Earlier we saw that a study by the Peterson Institute for International Economics had found that this could cause an increase in the prices of the drugs. What is your opinion?

Dr. Vance: Yes, and also that it would likely lower adherence to medication regimens and lead to worsened health outcomes for many americans. tariffs are very complicated in practice, and so therefore should be approached with caution. We need a targeted approach that addresses multiple problems such as reshoring, supply chains, and health-equity.

A Call to Action

Archyde News: What action should our readers take?

Dr. Vance: It is indeed really crucial for citizens to contact their elected officials to express their concerns about drug costs and access. Supporting organizations that advocate for affordable healthcare is also critically important. Moreover,patients should always discuss any concerns about medication costs or availability with their healthcare providers.

Conclusion and a Thought-Provoking Question

Archyde News: Dr. Vance,thank you. You’ve provided remarkable insight into the complex world of pharmaceutical tariffs. As a final thought, what one aspect of this debate do you believe is most often overlooked?

Dr. Vance: I believe many miss the critical balance between encouraging domestic manufacturing and ensuring affordability and access to medicines in the US. The decisions we make now will have lasting effects on the health and well-being of millions. What do you think will eventually happen to the supply chain if these tariffs appear?

Copyright archyde News 2025